I'm officially changing my nomenclature from "VRFB" to "VFB". Poor "Redox" will have to remain implicit.

Hi everyone.

The Cap and Floor minded-to decision list (i.e. the initial decision list, which I'll refer to as the IDL) was released yesterday. Out of 16 selected projects, only one utilises VFBs: the 520 MWh Frontier Legacy project. Assuming the 50-50 split between VFBs and ZBBs goes through, that's 260 MWh of VFBs.

Looking at posts and comments on various forums as well as the immediate reaction of the share price, the prevailing sentiment has been one of disappointment, frustration, and sometimes even rage. I have to say that I don't share that sentiment, and am perfectly satisfied with the result.

I think that the Flexbase announcement and the immense hype from Cap and Floor (part of which, I suspect, is my own doing) have somewhat bloated the scale of expectations. For one, 260 MWh is a larger capacity than Invinity's entire deployed fleet—an accumulation of nearly a decade of previous sales—combined. Before the Pacific Steel announcement, it would've been more than 10 times larger than Invinity's largest contracted sale. If the project comes to financial close as envisioned, it would be a fantastic stepping stone for a company as small as they currently are.

Furthermore, and just as important: this window was VFBs at their absolute weakest vs LIBs at their absolute strongest. Since the end of 2025, lithium and copper prices have gone up, demand is catching up to the previous oversupply, and China is completely axing its export tax rebates starting 2027. Meanwhile, Invinity's cost reduction program is progressing rapidly, vanadium prices remain low (perhaps too low, but that's another story), and Matt Harper even hinted at improvements to performance and efficiency during the FY25 report. After the top 13 in this round, competition became real tight, and Ofgem already expressed their desire for more windows. It won't take too much narrowing of the gap for VFBs to be in a materially better position.

Had the Flexbase deal not been announced, and had we not been receiving a steady stream of positive and promising news both from Invinity's core operations and the VFB market as a whole, I probably would have been more concerned about this result. The optics would then have been "a company with a product that nobody seems to want, clinging to the good graces of their local government for a contract." But that's not the case. C&F is one of many opportunities for Invinity, and they (probably) managed to get a nice big contract out of it, which is all I personally wanted out of it. Their success was never dependent on a single government scheme, and I believe they will get additional, large contracts from other opportunities (particularly from the US in the short term).

With all that being said, I definitely did have hopes that they would get more out of this window, and VFBs scored less than I expected compared to other tech. Many of the reasons for that I'll admit I don't really understand, so I think it's worthwhile to look over the results and see where things went well and where they went poorly. I'll first give on overview of how the assessment was performed and then focus on VFBs.

The Assessment

Everything written here is based on the published minded-to decision document, which you can read here.

The process was essentially one main assessment step, followed by two modification steps. The main step was the Economic Assessment (EA), which was by far the most important assessment of the scheme and served as the backbone of the IDL, providing an initial ranked list of projects. It was followed by the Financial Assessment (FA), which took the EA results and crossed out any projects whose revenue model Ofgem deemed too risky. Lastly, the Strategic Assessment (SA) was for Ofgem to take the modified list and apply any further modifications based on principles that were not included in the previous stages. The output of the SA was the final list.

The Economic Assessment

After taking the weighting of the different components into account, the EA ranking was made in the following manner: projects were ranked by how many points they received. A project could receive up to 247 points, divided as follows:

Component	Max points
Monetised Impact (BCR)	100
Security of Supply (SoS)	47.5
Avoided Renewable Curtailment (ARC)	37.5
System Operability (SO)	30
Wider Economic and Social Impacts (WESI)	20
Real-time Flexibility (RTF)	10
Option Value (OV)	~2

Here are brief descriptions of what each component described:

• Monetised Impact: this was determined by the benefit-cost ratio (BCR)—the ratio of the present value of various economic benefits of the project, detailed on pages 22-23, to the present value of the costs of the project (DevEx, CapEx, OpEx, and RepEx), calculated with a discount rate of 3.5% real over a 25-year appraisal period. The costs were taken from the P50 (most probably) estimates of the projects. To account for the different lifetimes of differing technologies, Ofgem assumed a fixed "economic lifetime" for each technology type, which they say "reflect the point at which a project would be expected to require significant further capital investment to continue operating." They then added a "terminal value" to reflect the added value from the operation of a project beyond 25 years up to its lifetime and used it to offset some of the costs. The lifetimes were assumed as follows:

https://preview.redd.it/t04hpkr3au9h1.png?width=1102&format=png&auto=webp&s=11ced4477bdabbac2eedd736990318e1cc26e746

• Security of Supply: "the contribution of each project to system adequacy." Basically a measure of a project's duration, energy capacity, and efficiency. Duration was by far the biggest deciding factor: if project A had a longer duration than project B, project A nearly always got a higher SoS score.
• Avoided Renewable Curtailment: self-explanatory.
• System Operability: the project's ability to perform additional grid-stabilising services: frequency response and reserve, stability, voltage control and restoration.
• Wider Economic and Social Impacts: "considers impacts not captured in monetised or other non‑monetised metrics, including effects on local communities, the UK economy and the energy sector."
• Real‑time Flexibility: Essentially a measure of a project's short-term power capability above continuous capacity (can it briefly charge/discharge at a higher MW than its rated capacity).
• Option Value: potential for future benefits. Mainly expansion capability and adaptation over time.

The Financial Assessment

The FA ended up having one role: to check whether, for each project, projected revenue lies above or below the "risk threshold" defined as 0.6 of Ofgem's calculated floor. Then take the ranked list from the EA, and push all the projects that were below the threshold to the bottom, keeping their internal ordering. In other words, the FA "crossed out" any projects that Ofgem deemed to present too large a risk of over-reliance on the floor.

The Strategic Assessment

A chance for Ofgem to make further modification to the list that were not captured before. It tested the projects for deliverability, interdependency, as well as their performance across a set of unfavourable future scenarios. In the end, the only modification was the addition of Frontier Legacy to the IDL, motivated by the desire for technological diversity.

Technological Comparison

Starting with the EA, to get a rough idea of the relative scoring of the main technologies (PSH, LIB, VFB/Zn, VFB), I averaged the EA scores along the various components over the top 35 ranked projects. This allowed me to roughly compare the scoring of the top performers along each category. Since none of the pure VFB projects made it that far up, I averaged across all five of them. The results were as follows (split into 2 tables for readability):

Technology	Projects averaged	Avg. EA Ranking	Avg. Final Score	Avg. Monetised Score	Avg. Non-Monetised Score
PSH	3	2.33	154.20	76.88	77.32
LIB	21	22.43	72.37	30.63	41.73
VFB	5	62.40	41.83	10.21	31.62
VFB/Zn	10	28.70	63.13	18.47	44.66

Technology	Avg. SoS	Avg. ARC	Avg. SO	Avg. WESI	Avg. RTF	Avg. OV
PSH	32.52	16.36	16.01	12.34	0.09	0.00
LIB	10.27	4.61	18.33	3.92	3.70	0.91
VFB	3.68	8.48	3.67	14.96	0.00	0.83
VFB/Zn	3.30	10.26	11.11	20.00	0.00	0.00

Pure VFB scored the worst overall, followed by VFB/Zn, LIB, and PSH. The same ranking holds for Monetised Score (BCR) alone. VFB and VFB/Zn scored best on WESI (unsurprisingly), and decently well on ARC. VFB scored decently well on OV, and VFB/Zn scored decently well on SO. Both scored poorly on SoS and RTF.

As for the RTE (Table 6 on page 70), The LIB projects got values between 85-91%, PSH got values around 80%, the pure VFB projects all got values of 69%, and the VFB/Zn projects all got 62%.

At the FA, no LIB projects were deemed below the 0.6*floor threshold. 2 PSH projects out of 5 were below the threshold, as well as 7 VFB/Zn projects out of 16. All 5 VFB projects were deemed below the threshold (except for Deeside, which provided no data and so got automatically removed).

At the SA, the PSH projects that were above threshold got decent Scenario-analysis (SA) scores (around 0), while the other two got -23. The VFB projects got between -25 to +20. The VFB/Zn projects ranged from -24 to +7, with the exception of Frontier Grange Lane that got -60 and Frontier Legacy that got -149. The LIB projects had the largest variations, ranging from -77 to +78, with two major outliers getting -123, -156.

As for deliverability, the PSH projects all got "Green" deliverability ratings, and the rest got a mix of "Green" and "Amber".

Thoughts

As I mentioned above, it still puzzles me that VFBs scored as low as they did. In several aspects.

The consistently low scores of the VFB and VFB/Zn projects in the monetised assessment as well as the fact that all five VFB projects were assessed to be below the FA threshold, even though the submitted data ranked them above, leads me to believe that the cost assumptions of the VFBs were very unfavourable. At £200/kWh, the LCOS difference between the VFBs and LIBs should not have been that big (or even negative in the first place), especially with the longer regime length of the VFBs and especially with a discount rate of only 3.5% real. This is further supported by the fact that the PSH projects dominated the BCR scores, in spite of their higher upfront cost and lower RTE compared to LIBs, presumably because of their longer regime lengths.

Speaking of regime lengths, the "economic lifetime" characterisation strikes me as particularly odd. For one, it seems very lenient on LIBs, giving all of them an economic lifetime of 25 years. They say this lifetime does include RepEx, but it also assumes the projects can go 25 years "without significant further capital investment" on replacement, which seems optimistic.

More importantly, for such an important factor in the assessment, this broad characterisation appears overly simplistic. It really seems like something that should be determined on a project-by-project basis. The lifetime of a given project could vary drastically depending on a variety of factors: which vendor do they source their batteries from? What is the rated cycle life/optimal longevity conditions of those specific batteries? Which services is the project planning to provide? How long will it be in a deep charge/discharge state? How much cycling is it planning to do? What is the battery duration? A 16-hour battery will obviously have a different lifetime than an 8-hour battery if it uses the same tech and is under the same environmental conditions and load profile. Ignoring all that for a single overarching number seems oddly irresponsible.

I also can't help but question the assumptions on the performance of the VFBs. The low BCR score (this time looking at the numerator) again suggests that low capabilities were assumed. There are also the strangely low SO scores of the VFB projects. They were deemed not only to perform significantly worse than LIBs for services like frequency response, stability, and voltage control, but were even ranked significantly worse than pumped hydro! Comparing them to the VFB/Zn projects, they were also deemed significantly worse than ZBBs in this regard. This simply doesn't fit with anything I know (or anything that has been published, as far as I could find) about VFBs.

There is also the matter of duration. Ofgem ended up putting great emphasis on it. Not only did the longer duration project achieve a particularly high BCR score, in contrast to the more common "diminishing returns" market consensus(suggesting that the benefit assessment greatly rewarded longer duration), but additionally 47.5 of the points were given by SoS, which is mainly a duration measure. With this in mind, I wonder why all VFB and VFB/Zn projects were only 8 hours (including Hagshaw, apparently), when Endurium is already capable of going up to 18.

I can only make guesses about the reasons for all this. For cost, one possibility is that, since the £200/kWh is currently a goal for 2028 and not a guarantee, Ofgem treated it as a P10 price (the optimistic projection that had no impact on the scoring), while the P50 pricing on which the BCR and FA scoring was based had been taken to be closer to the current amount, which is much less competitive. Another possibility is that Ofgem's Cost Assessment process (used for the final cost assessment) significantly increased the submitted P50 costs through pessimistic assumptions. It's also worth noting that EOL value (particularly the vanadium electrolyte) was not considered during the BCR cost assessment, though it was considered in the FA.

For performance, there is basically zero data nowadays on large-scale VFB deployments and deployments of latest-gen iterations of the tech, especially rigorous data taken by reputable third parties. It's therefore possible that the experts consulting Ofgem would have had to rely on old and fractured performance metrics of dubious reliability and extrapolate them to the scale of the C&F projects. If they had then taken the conservative performance assumptions to remain on the safe side, it could explain the low assumed performance capabilities of the VFBs.

The duration issue could be explained if Ofgem's decision to reward longer durations so heavily was taken late in the assessment process (which seems to be the case), while the VFB projects tried to remain on the safer financial side by sticking to the "lower" 8h durations.

If these guesses are close to the truth, that means we have a lot to look forward to. As time passes, Invinity will move closer to their cost goals and thus de-risk the cost assumptions, more data will be gathered on new-gen VFBs (like the PNNL's currently ongoing measurements), and the VFB projects will have a better idea of Ofgem's priorities and could optimise their plans for the next time, all of which will lead to drastically better scoring in subsequent windows. One positive development is that Ofgem elected to include Frontier Legacy in the IDL during the SA, showing that they do place a fair bit of importance on technological diversity and perhaps Invinity in particular.

At any rate, we are now at the feedback stage of the IDL, which will go on until 7 August, with the final decision list (FDL) to be published in autumn (presumably near the tail end of 2026). I'm sure that many industry experts and stakeholders much more knowledgable that I am will submit their input on the process and identify any misjudgement or error that might've occurred. Though I'm not expecting any significant change between the IDL and the FDL, it will be very interesting to see how the scoring of VFBs changes in subsequent windows.

The Competition Appeals Tribunal released its judgement in the Zenobe vs GEMA case. Every single one of Zenobe's arguments were shot down. The tribunal determined that the September publication did not constitute a subsidy decision within the meaning of the Subsidy Control Act (SCA), that the February decision to adopt the scheme indeed superseded the September publication, and that the adoption was properly taken pursuant to s. 10P of the Electricity Act 1989 (as amended by the Planning and Infrastructure Act 2025).

This eliminates this threat to the Cap and Floor scheme entirely and sets a legal precedent that eliminates any future threats based on the SCA.

You can read the full ruling here.

IESO published the initial (and likely final) results early. Three proponents were selected, all presumably Li-ion.

As I mentioned in the previous post and comments under it, this is not unexpected. Even if the conditions were more favourable to VRFBs, when it comes to reverse auctions it could simply be a matter of some developers accepting thinner margins than others to ensure they get rewarded (look at India for some extreme examples of this). It will still be interesting to keep an eye on the next three windows and see if there are any changes.

Now we wait for the main event: the Cap and Floor IDL, which should come out any day now (given that Ofgem is really starting to stretch the definition of "spring").

The Long-Term 2 Request for Proposals (LT2 RFP) is one of Ontario's two solicitation schemes for long-duration energy storage (the other being the Long Lead-Time RFP). The 2 is because it's the successor to Ontario's LT1 scheme, which concluded in 2024. LT2 is divided into LT2(e) and LT2(c), which are separate schemes respectively focusing on energy and capacity. The first round of LT2(e) already concluded, and of interest to us are the results of the first window (out of four planned) of LT2(c), i.e. LT2(c-1). Essentially all info on the scheme can be found on the official IESO page.

Unlike Cap and Floor, for which I'm highly confident that Invinity's projects will receive some share of the rewards, LT2 is more difficult to predict since the scheme is much more mechanistic.

The Scheme

LT2(c) seeks to award 20-year contracts to capacity projects. Awarded projects will receive fixed payments per discharge capacity, measured in $/(MW-business day), given in monthly instalments and proportional to the number of business days in a given month. In exchange, the projects must commit to be able to deliver their rated power continuously for at least 8 hours during the qualifying hours (7:00-23:00) of each business day. That is, on any regular Monday-Friday, at some point during the 7:00-15:00 window, the project must be at a state where it can discharge at its rated MW non-stop for 8 hours. Projects can be energy storage like batteries or non-storage like dispatchable generators (gas, biogas, biomass, etc.)

Like many capacity schemes, the solicitation works via reverse auction, where developers decide their rated MW and bid for the fixed $/(MW-business day), and the lowest bids win. The twist for LT2(c) are the Rated Criteria Points (RCP). A project can be given these points if it satisfies certain "bonus" conditions. The points then lower the project's actual bid to an "evaluated bid", and it's these evaluated bids that are actually compared against each other to determine who has the lowest ones.

Here's how it works quantitatively. A project is assigned up to 15 RCPs according to these buckets:

• Indigenous economic participation level (0–3)
• Local Indigenous participation (additional 0–3, if conditions met)
• Northern Zone location (0 or 3)
• Not in a Prime Agricultural Area (0 or 3)
• Duration capability during “Qualifying Hours” (0 if the duration is 8 to <12 hours, 2 if the project is storage with duration >=12h, 3 if the project is non-storage and duration is >=12h).

Additionally, projects can get assigned a Canadian-Status Proponent (CSP) point, which is basically assigned if the developer is based in/controlled from Canada.

After these points are determined, the evaluated bid (EB) is calculated from the actual bid (AB) via:

EB = AB × (1 − (0.20 × (RCP/15)) − (CSP × 0.02)).

In words, each RCP gives a 1.333% discount and the CSP point gives a 2% discount to the actual bid when calculating the evaluated bid. A project that's eligible for all 15 RCPs and the CSP point would get a 22% discount. Note that the evaluated bids are only for the sake of the reverse auction evaluation to determine the winners; the project payment will be given by the actual bid.

Invinity's Prospects

I couldn't find any specific VRFB projects bidding for LT2(c-1), but it's fair to assume that some are. Invinity explicitly mentioned LT2 on its HY25 presentation, and it also mentioned opportunities in Canada in its 5 May Trading and Commercial Update. Assuming that's the case, there are several elements that give Invinity an inherent advantage.

Contract Length

This one is simple. 20 years is above the point (~15 years) where VRFBs begin being more compelling than LIBs. I would've been more confident if it was 25 years, but it's still long enough to be advantageous. The contract length is also too short for pumped-hydro, which at any rate would compete in LLT rather than LT2 (the former being essentially tailor-made to PSH with 40-year contracts).

Duration

Though I didn't find any specific VRFB projects, I found plenty of LIB projects that explicitly mention bidding for LT2(c-1). All of the ones I found that disclose their capacity are 8-hour projects. Since there are no 12h LFP projects anywhere in the world right now, existing or planned (longest I found is 11.5h), it's fair to assume that only VRFBs will be able to cross the 12h mark among the BESS candidates, and the LFP projects will essentially all be 8h. This nets VRFBs several advantages:

1. Since projects must commit to deliver 8 hours of continuous discharge on every business day, an 8-hour battery must be fully charged at some point during the 7:00-15:00 window on each such day, assuming it bids its maximum power capacity to the scheme. Bidding a lesser power capacity (MW) would obviously have its own disadvantages, since it increases the $/(MW-business day). This is brutal for the lifetime of LIBs, given that they hate being fully charged.
2. A 12h VRFB would get 2 RCPs, i.e. a 2.666% discount to the evaluated bid.
3. A 12h VRFB still needs only to commit 8 hours to the scheme contract, leaving 4 hours of capacity to do whatever it likes without worrying about breaching the contract. For example, if there happens to be a period of high demand during the early morning hours (before 7:00), the 12h battery can capitalise on that, while the 8h battery would worry about discharging since it will then need to recharge later during a period of possibly even higher demand. Obviously it would also benefit if high-demand periods during the day exceed 8 hours.

Domestic Production

Aside from the obvious proximity advantage of Invinity's Vancouver facility, there are other economic benefits. Canada has a 7% tariff on all imports considered "lithium-ion electric accumulators" for use in stationary energy storage. This includes LFP cells, modules, racks, fully containerised systems, and basically all non-auxiliary parts of the battery. There are very few BESS integrators within Canada, all of which use Chinese cells, meaning the 7% tariff will apply on a significant part of the battery's cost even in the best of cases.

On the other hand, all VRFB parts—including vanadium electrolyte—are duty-free so long as the full system is assembled in Canada.

Weather

Another simple one. Ontario is cold, and the Northern Zone in particular is frigid. This would significantly impact the performance of LIBs, which would require intense heating to remain near their optimal 25^(o)C temperature. On the other hand, Invinity already proved the performance of their batteries in the Canadian cold with their Chappice Lake project, which required only a simple shed around the batteries without additional HVAC. This would be particularly beneficial for VRFB projects in the Northern Zone, which would enjoy this performance advantage as well as the 4% discount from the RCPs.

Conclusion

All this adds up to say that projects utilising Invinity's VRFBs have a decent chance of getting awarded, especially if they bid based on Invinity's 2028+ pricing goals. As I've said above, it's much less guaranteed than Cap and Floor, and there are several things I would have liked to see that would've increased my confidence (longer contract times, incentives for supporting domestic production, etc). But at the very least it's something to keep an eye on. As the title says, the results will be announced on the 16th.

The three analysts covering Invinity (Canaccord Genuity, Longspur Research, and VSA Capital) released new reports following the Laufenburg announcement.^(1) They mostly covered the same stuff we know already, but two of them contained information about Cap and Floor.

Canaccord Genuity said they anticipate the "next significant newsflow" on Cap and Floor (obviously the IDL) to be in mid June. They further estimate that the projects collectively are likely to be "as big or larger" than Laufenburg.

VSA Capital is even more specific. They claim that "IES was selected across nine bids in the UK LDES Cap & Floor Scheme (each 400MWh or more)."

There are no public announcements from Ofgem yet, so I can't independently verify these statements. But Canaccord are a nominated adviser and joint broker for Invinity, while VSA are a joint broker,^(2) so both are likely to have access to insider info.

EDIT: VSA's "nine bids" comment refers to the fact that nine developers originally chose Invinity for their projects in the initial eligibility stage.^(3) I was confused by the strange phrasing and the fact that this detail was included in a report that came out now. Thanks to Senior_Amphibianz for bringing it to my attention and apologies for the confusion.

[1] https://invinity.com/investors/analyst-research/#rtuid/stop

[2] https://irtools.co.uk/88/story/pdf/2fb0858d-acb3-4131-beaf-167b33493148

[3] https://www.ess-news.com/2025/06/24/invinity-flow-batteries-selected-for-nine-400-mwh-plus-uk-storage-bids/

The report by JMK Research and Analytics and the Institute for Energy Economics and Financial Analysis (IEEFA) discusses the Indian BESS industry and particularly the viability of current tariff schemes (tariffs here mean fixed payments auctioned for energy storage developers, not the Trump kind). Of particular note are pages 17-18, which anticipate a diversification of storage technologies in the future, and isolate VRFBs as a prominent example. The same pages also discuss the push for increased domestic manufacturing. This is of course relevant to Invinity through their strategic partnership with Atri Energy Transition. You can read a summary of the report in this ESS News article:

https://www.ess-news.com/2026/05/19/india-awards-10-4-gw-of-standalone-bess-capacity-in-2025-but-tariff-viability-remains-a-concern/

Right now, Indian storage tenders are quite short-sighted, with heavy penalties for AC-AC RTE lower than 85% (which essentially excludes any technology except LIBs), contract tenures no longer than 20 years (and usually no longer than 15), and storage durations capped at 4 hours. Hopefully we will see more flexible and LDES-focused tenders coming in the near future.

The LDES Council is also pushing for increased attention to longer durations, as evident by the white paper they released last month in cooporation with various Indian stakeholders.^(1) In July and August of last year, the Council also signed MoUs with the National Solar Energy Federation of India^(2) and The Energy and Resources Institute^(3) to advance LDES deployment.

[1] https://ldescouncil.com/wp-content/uploads/2026/04/LDES-India-Policy-Paper_April-10-final.pdf

[2] https://ldescouncil.com/ldes-council-and-nsefi-partner-to-advance-long-duration-energy-storage-ldes-for-indias-clean-energy-transition-2/

[3] https://www.linkedin.com/posts/teriin_terienvisions-activity-7353042748075106305-IFZn/

Part 3: Global Expansion, Partnerships, and Developments.

The UK

Cap and Floor

This is without question the biggest potential catalyst in the company's history so listen sharp.

In October 2024, the UK government announced the implementation of the LDES Cap and Floor Scheme, to be delivered by the Office of Gas and Electricity Markets (Ofgem).^(58) The program, born out of the curtailment crisis in the country, will reward selected projects with revenue floors and ceilings (caps): If the project's revenue falls below the floor, it will be topped-up by the consumers, and if it rises above the cap, the difference will be returned to the consumers. The scheme thus offers incredibly lucrative, guaranteed revenue stability to developers. Ofgem disclosed it intends to reward up to 7.7 GW of projects through to 2035,^(59) which is about 22% of the current total power demand of the UK grid.^(60)

The application process officialy opened on 8 April 2025 and has two steps: Eligibility Assessment and Project Assessment. The Eligibility Assessment meant to confirm that applicants met the minimal conditions: Projects had be capable of at least 8h discharge duration at full power, and had to have either TRL 9 with a minimum of 100 MW power capacity (so called stream 1) or TRL 8 with a minimum 50 MW power capacity (stream 2).^(61) Projects were further devided into tracks, with track 1 projects deliverable by 2030 and track 2 projects by 2033. They were also asked to show basic deliverability evidence as pertains to stuff like grid connection, planning consent, etc.

The Eligibility Assessment outcome was published on September 23.^(62) Out of 171 projects that applied, 77 passed this stage, 21 of whom utilize VRFBs. Of those 21, 5 are entirely VRFBs, while 16 are hybrid projects of VRFBs and ZBBs. All 21 projects named Invinity as their VRFB supplier. The 16 hybrid projects all belong to Frontier Power Limited and name Eos as their ZBB supplier. Only 1 project of the 21 belongs in Track 2. The total VRFB energy capacity of the 21 projects is 16.7 GWh. The largest of them is Hagshaw LDES, a pure VRFB project with 500 MW power output and 6 GWh energy capacity. Of the remaining 56 projects, 48 use LIBs.

Needless to say, this is massive. The smallest of these projects has a larger VRFB energy capacity (~>=260 MWh) than all of Invinity's currently deployed fleet combined, and the largest (Hagshaw) would likely mean over a billion dollars in revenue on its own.

We are now in the middle of the project assessment window, with an initial decision list to be published this spring, and the final list in the summer. The full assessment criteria are too involved to be discussed here in detail (you can read about them in references 63-66), but we can examine the parts that are more technology/supplier-specific in nature to get an idea of Invinity's prospects, particularly compared to the LIB projects. Ofgem asesses the projects across three pillars: Financial Assessment, Ecnonomic Assessment, and Strategic Assessment.

Financial Assessment broadly measures the direct bankability of the project. Its key metric is R=Project revenue as a % of the project floor level, meant to gauge whether a project will be a burden on consumers by spending too often below the floor. The floor level is determined by Ofgem's assessment of the project's total costs over a default 25 years regime, where a project with higher costs requires a higher floor to cover them and is henced punished with a lower R value.

The key point is that, unlike commercial LCOS estimates with their 8-12% discount rates, Ofgem determines the floor so as to have a rate of return of only 4.47% CPIH-real (it's common for government schemes to use lower discount rates than commercial initiatives). This enormously rewards longer lived assets. An LFP battery that reaches EOL after 6,000 deep cycles and needs to be replaced after only 15 years will be hit with a 50% present replacement cost. Moreover, projects are granted the ability to increase their regime length beyond 25 years, which will reduce the floor level by spreading it over a longer time, as well as include EOL value in the assessment, which Ofgem assumes to be 0 by default. Both of these further buff VRFBs with their 30+ year ratings and high EOL value.

The Economic Assessment measures the project's broader impact on the UK grid and socio-economic consumer welfare, and is a mixture of quantitative and qualitative scoring. Most of it is project-specific metrics like effect on wholesale market costs, supply security, avoided curtailment, local community impact, etc. But one metric to take note of is "skills and supply chain – qualitative impact".

Ofgem doesn't use a mechanistic "number of jobs created/supported" metric since they aknowledge the possiblity that, for example, a project will create some jobs by displacing others. However, in their own words:

>"We recognise that some Projects may have a positive impact on local labour markets and supply chains, through investment in specialised skills, or their commitment to source workers and materials from local markets and domestic supply chains, or by supporting the stimulation and export potential of UK-developed technology. Where this is the case, we will consider any evidence put forward by Projects and consider it as part of the qualitative assessment of wider economic and social benefits."

This is relevant to us because Invinity is the only stationary battery manufacturer in the UK. The acceptance of VRFB projects and the resulting ramp-ups of Bathgate and Motherwell will directly create hundreds of skilled jobs, at no expense to others.^(67) Moreover, Invinity's unique status places pressure on the UK government to signal that they encourage and reward domestic production, which is clearly an image they want to broadcast.^(68-70) Ofgem even directly refers to references 69,70 in their assessment documentation.

Lastly, the strategic assessment is a smorgasbord of everything that doesn't fit in the other two. It includes deliverability, risk of cost overruns, project interdependency, etc. The metric of most interest to us is the first one they list: technology diversity. Quoting them again:

>"We expect it could be in the long-term interest of consumers that we limit overreliance on a narrow set of LDES technologies. There may also be societal benefit from insight derived from the relative performance of different LDES technologies. As part of the Strategic Assessment, we will consider the overall portfolio of assets that perform strongly within the Economic and Financial Assessments and its measure its technological diversity."

They do add a caviat that they will not uphold technology diversity at all costs, and that the economic and financial factors are still the higher priority, but this is still encouraging.

All of these taken together, along with the fact that the government awarding these schemes literally has a 19% stake in Invinity (I know, the agencies are supposed to be independent, but behind closed doors...) lead me to believe that the scenario where VRFBs will be left in the lurch is highly unlikely. While not all 21 projects will be accepted, all it would take is a fraction to launch Invinity into the stratosphere, and for at least that much I am very optimistic.

Killellan

Another development to keep an eye on is the Killellan AI Growth Zone, a proposed hyperscale hub in Argyll, Scotland combining data center capacity with on-site renewables.^(71) The project is led by Argyll Infrastructure Holdings Limited, with partners listed in its application including Schneider Electric, Lenovo, CorPower Ocean, Invinity Energy Systems, and Suir Engineering.

Of relevance to us is the renewable aspect. The project's planned power capacity is 500 MW by 2030, and 2 GW by 2035. Earlier stages describe a micro-grid configuration, with grid integration planned at the advanced stages. If we assume a resonable minimum duration of 8h, that's at least 16 GWh of storage capacity, comparable to the entire Cap and Floor lineup. Invinity has been named as the supplier of this capacity.^(72)

The project is proposed as a bid for the UK Department for Science, Innovation, and Technology (DSIT)'s AI Growth Zone programme.^(73) Launched in early 2025, this is the UK's main initiative to encourage a domestic AI industry. It rewards selected projects with priority access to grid power, lower operating electricity costs, streamlined planning and permitting, and possible financing support.

Applications are made on a rolling basis, with no time limit. Unlike Cap and Floor, DSIT don't list a detailed assessment criteria for projects, only the minimum criteria: projects are required to demonstrate access to >=500 MW by 2030, water and land availability, suitable planning and delivery feasibility, assessments of local impact, and disclose the requested level of government support.^(74)

Considering that Killellan will live or die based on its acceptance into the programme, it's harder to get an estimate on its prospects compared to Cap and Floor. But there were some encouraging developments recently. On 10 Jan 2026, the Swiss firm D M Investments AG has taken control of Argyll Infrastructure Holdings Limited with >75% ownership of shares and voting rights.^(75) Before this, the funding efforts have so far raised only an initial £15m and unlocked negotiations for another £100m out of the total £15bn required for the project.^(76) The new institutional management materially improves their chances to raise the required capital.

That being said, even within arguably the biggest infrastructure investment frenzy since the Railway Mania, £15bn is a lot of money. It's therefore best to regard Killellan more as a (very large) possible bonus, rather than a major part of the thesis.

China

Unsurprisingly, China currently leads the global charge when it comes to energy storage in general and VRFBs in particular. With their penchant for mega-projects, their energy storage focus has historically been on pumped hydro, but is increasingly broadening to other technologies with goals to achieve more than 180 GW of installed new-type battery storage by 2027 (new-type meaning other than hydro).^(77) Their 15th five-year plan will be released this month and is expected to detail their storage plans up to 2030. The approved outline is already available and includes a pledge to vigorously develop new-type energy storage.^(78) In January 2026, the world's first 1GWh VRFB project was completed in Xinjiang, developed by state-owned China Huaneng Group, with Rongke Power supplying the batteries.^(79) I hinted at Invinity's Chinese connection in the history section but it goes much deeper than that.

First, the Baojia partnership is still going strong. In their recent end of year update they announced that they completed the transfer of Endurium's initial balance of system manufacturing to Baojia, which can be expected to further reduce its costs.

More exciting is the UESNT partnership. The vanadium supply deal already mentioned is fantastic, but it's not even the headline of the agreement. Quoting Invinity directly:^(80)

>"Under the Agreement, which runs to 2030, UESNT will gain the right to market, sell and manufacture ENDURIUM VFBs for the Chinese market. UESNT will pay Invinity a royalty fee based on the volume of ENDURIUM VFBs delivered each year as well as two one-off royalties, on satisfaction of certain conditions.

>Under the Agreement, Invinity is able to source sub-components and completed ENDURIUM systems manufactured by UESNT for delivery outside of China, which the partners expect will significantly reduce the manufactured cost of ENDURIUM projects delivered worldwide and further enhance Invinity’s global competitive position."

So on one hand, Invinity gets additional cost reduction by sourcing manufacturing to another Chinese firm (in addition to the vanadium agreement). On the other hand, they get a high-margin stream of cash from UESNT's own sale royalties.

And there were more good news to come.

Last September, Invinity, representing a consortium of companies including Baojia, UESNT, and International Resources Limited (IRL, a Hong Kong-based company with a vanadium mine in South-Africa), signed an MoU with state-owned Chinese juggernaut Xiamen C&D, a Fortune Global 500 company (ranked #98). Again quoting Invinity:^(81)

>"The MoU envisages that C&D, with the assistance of the Xiamen Municipal Government, will support the proposed Consortium in scaling up Chinese manufacturing capabilities for Invinity batteries in the region. Furthermore, C&D have indicated willingness to offer the proposed Consortium working capital support and also provide it with access to C&D’s global supply chain platform, which is intended to accelerate the proposed Consortium’s plans to optimise procurement, logistics, and distribution for large-scale production."

So now Invinity has established a firm foothold in China, with multiple signed partnerships and backing by one of the largest companies in the world. It will be noted that this is still just an MoU, not a binding agreement, and negotiations about the details are ongoing. But considering Invinity's track record in China and the high profile of the signing—attended by senior British and Chinese government officials including the British Ambassador to China— there is reason to be very optimistic about their future in the country.

The US

You would not be blamed for thinking that a battery manufacturer could face headwinds in the US nowadays, but it turns out the opposite is true.

The Trump administration famously (or infamously) crippled the Biden administration's tax credits for solar and wind projects through the One Big Beautiful Bill Act (OBBBA), which changed the eligibility deadline from a gradual phaseout starting late 2032 to a hard cutoff in 31 Dec 2027. But the new act explicitly excludes energy storage technologies from this change,^(82) and the qualification timeline actually improved under it, with a gradual phaseout starting only in 2034. The credits can be categorized by those given to manufacturers, and those given to developers.

For domestic manufacturers, IRS §45X gives a transferable production tax credit of $45 for every kWh of produced capacity, as well as a 10% tax credit on all electrode active materials, which includes the vanadium electrolyte for VRFBs.

For developers, IRS §48E starts with a base transferable tax credit of 6% of the energy storage CapEx. This turns to 30% if the project meets PWA requirements, gets another 10% if it satisfies domestic content conditions, another 10% if its in an energy community, and another 10-20% for <5MW projects in low-income areas, for a total of up to 70% credit.

And here's the kicker. The OBBBA did introduce one significant change: a Foreign Entity of Concern (FEOC) restriction. Both §45X and §48E credits will not apply if more than 45% of the energy storage cost is derived from components that "recieve material assistance from a prohibited foreign entity", with the threshold decreasing by 5% every year starting 2026 down to 25% in 2030. This includes any components sourced from companies located in or owned by entities in North Korea, Russia, Iran, or—you guessed it—China. This immediately includes all LFP BESS with Chinese cells.

A domestic VRFB manufacturer will therefore not only be able to compete with Chinese LFP—it will wipe the floor with it. It compounds a 10% electrolyte discount, a 45$/kWh production discount, and up to 70% developer CapEx discount, while the LFP gets nothing while getting hit with tariffs.

The only possible competition would be domestic LFP cell producers. There are only a few of them currently in the US, all early stage (LG Energy Solution is probably the most advanced), and none capable of matching Chinese costs. Moreover, there are very few non-Chinese manufacturers of LFP cathode active materials (CAM), most notably Aleees in Taiwan. Since the costs of those active materials alone accounts 40-60% of the cost of an LFP cell (depending on raw material costs), no US LFP manufacturer today is entitled to §45X production tax credits. For example, LG Energy Solution is sourcing their LFP CAM from China-based LBM.^(83)

It will take years to build up a domestic CAM manufacturing capacity, and even more years for it to scale up to meet the explosively rising demand. During this entire time, LFP manufacturers will either have to source Chinese CAM or try to outbid their competitors for non-Chinese CAM, which will drastically reduce the benefits of the tax credits due to higher bidding costs. For all those years, the only BESS manufacturers who would be eligible for and fully benefit from §45X tax credits are non-lithium manufacturers.

As hinted at in the financials section, Invinity did not sleep on this opportunity. Last month, they announced a new MoU with a (yet undisclosed) US partner to open a fourth production site in California with a capacity of up to 1 GWh per year. They explicitly state that the facility will meet the domestic content and sourcing requirements of the OBBBA. As explained above, this will give them a $45/kWh and 10% material discount advantage even over domestic LFP manufacturers.

This will necessarily require domestic vanadium sourcing, and there is reason for confidence here as well. In 2022, Invinity signed an MoU with U.S. Vanadium to create a joint venture combining vanadium electrolyte supply with battery manufacturing. The original terms of the MoU are probably no longer applicable, but this shows Invinity already has the connections to allow for rapid deployment, and they have already disclosed that they're lining up a North American supplier.

In the same announcement, they revealed the "Vice President, Business Development" appointment of Shane Mcbee, who transferred over from the position of "Vice President, Strategic Corporate Accounts" at Eos (take from that what you will). Both domestic electrolyte sourcing and battery manufacturing are scheduled to start later this year.

Aside from the federal boons, there are also many state-level initiatives to enjoy from with this new US presence. Here's a brief rundown of the big ones:

California: Has a dedicated LDES program specifically for non-lithium technologies that already funded the Viejas project.^(54) Will solicit up to 1 GW of 12h+ LDES to be comissioned between 2031-2037 (separate from an additional 1 GW of multi-day storage).^(84) Many cities and towns in the CA are imposing bans and moratoriums on LIB BESS, most recently Vacaville.^(7) Last month the state signed an MoU with the UK, expressing intent to stengthen cooporation, particularly in advancing renewable energy and "energy storage, including long duration technologies."^(85)

New York: Targets 6 GW of energy storage by 2030, including 3 GW of bulk storage and 1.5 GW of retail storage.^(86) Explicitly carves out 20% of bulk solicitations to 8h+ LDES.^(87) Allows contract terms of up to 15 years for lithium-ion batteries but up to 25 years for non-lithium technologies. Is experiencing a similar and perhaps even stronger trend of LIB BESS bans, most recently Troy.^(88)

Massachusetts: Plans to solicit 5 GW of energy storage by 2030, with at least 750 MW earmarked for 10-24h LDES.^(89)

India

India has ambitious goals to achieve 50% installed non-fossil fuel energy capacity and reduce emission intensity of its GDP by 45%, all by 2030. The Indian government aknowledges the importance of energy storage in this effort, and predicts that the country will require 411 GWh of storage by 2031-32, 236 GWh of which from BESS.^(90) By the nature of renewables, there's no doubt that a large portion of this new capacity will be LDES.

Marking Invinity's entry into the Indian market is their strategic partnership with Atri Energy Transition, signed with the explicit intent of establishing production capacity within the country. The reasoning is that India is placing increasing emphasis on domestic production through both its tenders and incentive programs.

One noteworthy program is the Advanced Chemistry Cell Production Linked Incentive (ACC PLI), where firms bid for cash subsidies for manufactured production, for a maximum of ₹2000/kWh (~21.8$/kWh).^(91) To qualify, manufacturers must commit to ensuring at least 25% of cell value is produced domestically within 2 years of the appointed date, with the number going up to 60% after 5 years. I won't go over the details since this post is long enough, but the program is devised as such that manufacturers who commit to a higher domestic production fraction and larger production capacity can get higher subsidies. Note that although the program uses the word "cell", it's technologically agnostic.

Moreover, Indian government tenders often classify bidders as Class-I local suppliers (>50% domestic production), Class-II (>20%), or non-local (<20%), with preference given to the higher classes (classic India).^(92,93)

In-country manufacturing will therefore give Invinity a significant competitive advantage. Note that the blazing hot summers in many parts of India give VRFBs an additional boost compared to LIBs, due to their ease of cooling.

Canada

The Canadian federal government offers a 30% refundable investment tax credit on clean technology, including BESS. Excitingly, just last month it began consultations on potential domestic content requirements,^(94) which would be fantastic news for Invinity with their operational Vancouver factory.

On the provincial level, Ontario leads the charge with its IESO Requests for Proposals (RFP), particularly the Long-Term 2 (LT2) and Long Lead-Time (LLT) RFPs.

LT2 is divided into a capacity services track, LT2(c), and energy supply track, LT2(e)^(95). LT2(c) is of most relevance to us: it aims to procure up to 1.6 GW of energy storage capable of at least 8h discharge duration, and has a built-in incentive for 12h+ projects. The procurement will be done in 4 annual windows, from 2026 to 2029. The first window aims to procure up to 600 MW of storage. It's framed as a reverse-auction, where projects bid their desired fixed capacity payments in $/(MW-business day) and get possible bonuses from incentives like the 12h+ one. The lowest bidders then get chosen and awarded 20-year contracts. The submission deadline for the first window was on 18 Dec 2025, and results are expected to be announced on 16 Jun 2026.

LLT is a variation of LT2 designed for projects that require longer lead times but offer longer lifetimes.^(96) Like LT2, it's divided into LLT(c) and LLT(e), and uses essentially the same selection scheme. LLT(c) aims to procure up to 800 MW of storage. The main difference is that LLT projects are awarded 40 year contracts, but eligible projects must reach commercial operation within at least 5 years of the award. The details are still being drafted, but right now final proposals are due 1 Oct 2026 with selection notice on 30 Mar 2027.

Invinity explicitly mentioned both LT2 and LLT in their H1 2025 investor presentation, and has undoubtably contracted bidding projects. The cold winters in Canada can also be expected to give VRFBs a relative performance boost (the VS3 Alberta project was installed inside a simple shed with no additional HVAC). Moreover, there are incentives for projects built in the Northern Zone of Ontario, which boasts a particularly cold climate.

Taiwan

A few months after Everbright's investment in Invinity, the companies signed an MoU to establish a manufacturing partnership. This transformed into a binding agreement in February 2024. The agreement stipulates that Everdura will manufacture Endurium batteries locally, with cell stacks bought directly from Invinity's UK/Canada factories, targeting the sale of over 255 MWh of capacity over a three-year period. It will also pay Invinity a royalty fee for a precentage of product sold.

In December 2024, Everdura announced it was building a manufacturing base for Endurium with an initial capacity of over 1 GWh per year.^(97) In March 2025, the Invest Taiwan Office announced that Everdura would invest nearly NT400 (~$12.6m) in Sanyi, Miaoli to build production lines for vanadium flow battery energy storage.^(98)

Invinity therefore gains revenue from selling the cell stacks as well as yet another source of high-margin royalties from a manufacturer abroad. Currently, the Taiwan energy storage market is suffering from severe overcapacity issues, which has probably led to a postponement of Everdura's efforts. We can expect activity to resume once generation catches up to storage once more.

Summary

So, what we have here is the leading manufacturer of a specialized product in rapidly increasing demand within one of the fastest growing markets today. They're enjoying explicit government support and penetrating nearly every top economy on the planet with a piling collection of strategic partnerships, no debt, and a large reserve of cash providing it a clear runway. All this while global policy continuously produces new programs and initiatives with each promising to increase their revenue by orders of magnitude.

And no one is talking about it.

There are almost no news articles, no online discussions, and all of three analyst coverings. The market cap remains around a comical ~$150m, and the trading volume is miniscule.

It's a rare enough thing to find a hidden gem in this day and age, but I cannot interpret this in any other way. If I had to guess, its a result of LIBs and SIBs pulling in all the attention, the company being based in the UK and primarily traded on the LSE, and the last earning's top line completely misrepresenting their current status. Whatever the reason may be, I'm not complaining, since it allowed me to enter early and enjoy the ride.

Sources in comments. TL;DR at the top of part 1.

Part 2: Technological Comparison, Invinity's History, and Financials.

The Competition

The comparison up until this point has been with LIBs, for obvious reasons. But VRFBs are not the only technology aiming for a share of the BESS market, and it’s important to see how they compare with other upcoming battery types, especially in the use cases where they show most promise. This section will inevitably be more chemistry-heavy, but I tried to keep it readable.

Sodium-ion Batteries (SIBs)

By far the most talked about competitor to LIBs. SIBs currently struggle with all the usual challenges one would expect from a bleeding edge battery technology, but there are more fundamental issues.

Sodium and lithium are both alkali metals and so share most of their chemical properties. Consequently, SIBs and LIBs have largely the same engineering schemes. But sodium has a lower redox potential, meaning it can maintain a smaller cell voltage than lithium, which translates to SIBs suffering from a lower energy density than even LFPs. Sodium ions are also larger, which means slower diffusion rates through the electrolyte, hence higher internal resistance and lower charge rates. Their larger size also means it’s more difficult to get them to intercalate in the electrodes, and that they cause greater volume expansion in the electrodes once they do, leading to increased mechanical stress and issues of stability and longevity.^(27)

One claim that I hear way too often is that SIBs are safer than LFPs. This is just plain false. The only SIBs that are anywhere close to commercialization use flammable organic solvents, just like LIBs. Research consistently places them squarely between LFP and NCM in terms of safety: when compared to LFPs, they exhibit lower thermal runaway onset temperature, faster temperature rising rate, higher maximal runaway temperature, and emit more gases.^(28-31) Moreover, though it varies by chemistry, the gases emitted by SIBs tend to have a wider explosive limit range, meaning they are more likely to combust. Particularly nasty is propylene carbonate, the most common solvent choice, as it releases propylene gas (basically propane on crack).^(32)  

Comparison of safety parameters between an NCM LIB, an LFP LIB, and an NTM SIB. Left: thermal runaway onset temperature, safety venting temperature, separator collapse temperature, and maximal runaway temperature. Higher is better for the first three, lower is better for the last. Right: kinetic analysis of thermal runaway in the three batteries. Lower is better. Reproduced from reference [28] with permission.

Overall, performance-wise, SIBs can be viewed as a worse version of LFPs.^(33,34) Their only major improvement is their superior performance in low temperatures, which could be significant for EVs in colder climates (since they don’t have HVAC systems supporting the battery 24/7). But considering their intrinsically lower RTEs, it would take truly arctic environments for this alone to close the performance gap with LFPs in BESS applications.

The main selling point of SIBs is that their theoretically lower production costs will justify their diminished performance, particularly in BESS applications. This is a viable assessment, since SIBs contain no lithium and at most tiny amounts of copper, while all their contained materials are cheap. To see how big of an advantage that is, the intensity of lithium in LFPs is ~0.53 kg/kWh LCE equivalent, while that of copper is ~0.48 kg/kWh, so their respective raw material cost contributions are ~14.31 $/kWh and ~6.6 $/kWh (with prices given at the time of writing), combining to a total of ~20.91 $/kWh—about 30% of the total pack price in China at the end of 2025 (though the pack prices are higher now).^(35) This percentage is expected to increase as both copper and especially lithium prices grow with demand while production costs continue to decrease.

It should be noted, however, that the above issues with sodium call for high-performance electrodes and more sophisticated cell engineering, and it’s currently unclear how large of a gap will remain between the production costs of the two technologies.^(36) Moreover, their lower RTE, stability, safety, and longevity incur a heavy LCOS tax, which makes it even more challenging to determine whether they’ll actually make for a more economical alternative to LFP.

There is one undeniable advantage of SIBs: abundance. Both lithium and vanadium demand is expected to exceed supply soon, whereas sodium is everywhere. When developers literally cannot get their hands on other technologies, SIBs will almost certainly be the default choice. This alone promises to carve a substantial chunk of market for them. The possibility of SIB use will also mitigate the strategic vulnerability of relying on foreign, possibly hostile countries to supply materials for an industry as critical as this one.

So where does this all place SIBs in relation to VRFBs? Nowhere different than LIBs, really. They don’t fare any better in any of the metrics that VRFBs excel at—in fact they fare worse, in exchange for possibly lower cost. The only scenario I can think of where a developer would choose VRFBs over LIBs but not over SIBs is one in which the cost advantage of the latter would be so great as to offset the considerations that gave VRFBs the edge. It’s hard to believe that this would be the case, and in some use-cases (safety in particular) it will be impossible. SIBs therefore don’t threaten to take any larger a market chunk from VRFBs than LIBs.

Zinc-Bromine Batteries (ZBBs)

ZBBs have existed for over a century and are currently seeing a revival due to promising technological advancements. They can come in either static or hybrid flow variants. The hybrid flow types have fallen out of favor, and all their former manufacturers are now defunct (Primus Power are still technically alive but have not been operating for years). I’ll therefore focus on static ZBBs, championed outside of China primarily by New Jersey-based Eos Energy Enterprises.

Starting with the advantages, static ZBBs currently run circles around any other battery technology when it comes to BESS energy density. Their electrochemical density is only a third that of LFP’s, but Eos recently announced their new Indensity architecture, which allows to stack the batteries up to twelve units high, netting them a staggering maximal areal density of 1 GWh/acre. This makes ZBBs a very attractive choice for any project with rigid spatial constraints. They also have an impressive operating temperature window, ranging from -10 to 50 C, meaning they require only minimal cooling (if any) in most climates.

Another significant advantage is material costs, since both zinc and bromine are common and cheap, together requiring about 8 $/kWh.^(37) The main material cost factor is probably the electrolyte itself, which needs to contain complex mixtures of additives and buffering agents to reduce the known problems of the chemistry. Nevertheless, ZBBs can theoretically compete with sodium ion when it comes to cost once their production is streamlined.

When it comes to RTE, static ZBBs lie neatly between VRFBs and LFPs, with cells in lab conditions attaining efficiencies of up to 90%.^(38,39) Examining real world deployments, in their latest earnings presentation Eos claimed an average deployed RTE of 84.6% for their latest Z3 batteries. They don’t say either in the presentation or in the recorded meeting whether that’s DC or AC-AC efficiency, which almost certainly means it’s the former (also the alternative would be ludicrous). Furthermore, these figures were given for 20-80-20% depth of discharge (DOD) windows, which miss the most inefficient parts of the operation. This is confirmed in their product sheet where they say “the maximum DoD can be reduced for applications demanding round trip efficiency in the mid-80s”,^(40) which implies that DC RTE is at most ~80% in deep discharge deployments, of most relevance to LDES (this is why I hate using company data). Taking all this into account, the fully deployed RTE can be expected to be around ~70% for LDES, which is in line with the literature values.

Longevity is tricky. Historically, ZBBs suffered from significant longevity issues, stemming from reactions like zinc dendrite growth on the anode (basically tiny snowflake-shaped stalactites), hydrogen evolution, and corrosion from the free bromine in the battery.^(37) Great strides have been made in mitigating these issues, however, and modern ZBBs can remain stable for over a thousand cycles.^(42) Eos claims a cycle life of 6,000, which would place them competitively against ion batteries. They again don’t specify how number was attained, which leads to suspicion that the conditions were highly favorable, like shallow cycling near 50% SOC and slow C-rates where many of the problematic reactions are negligible. That being said, it’s entirely feasible for ZBBs to reach this figure in realistic deployments given the rapid technological advancements.

Zinc dendrites in an anode. Reproduced from reference [41] with permission.

 One key challenge of ZBBs is their self-discharge rate, caused by the diffusion of bromine and polybromides from the cathode to the anode.^(43) This is particularly problematic for LDES applications, where the battery is expected to hold its capacity for many hours if not days. An unmitigated ZBB will discharge about 50% of its charge capacity within 2 hours. Luckily, advancements involving the trapping of the problematic bromine within the cathode have worked to ameliorate this effect, with some lab cells boasting a self-discharge of only 3.9% over 24 hours.^(44) It remains to be seen how small this can get for scaled batteries in realistic deployments. Eos say nothing about self-discharge in their published materials.

Lastly, ZBBs face some significant safety issues. On the plus side, their aqueous electrolyte is much less acidic than VRFB’s, with a Ph of 2~4. They’re also non-flammable in normal operations and exhibit minimal risk of thermal runaway. However, at high state of charge, the protons in the acid can react with the electrons in the anode to form hydrogen gas, which is flammable, although it disperses rapidly in open spaces since it’s so light. It also increases the pressure within the battery, causing mechanical strain and potentially rupturing the cell (hydrogen evolution occurs in VRFBs as well, but to a much lesser extent, and is resolved in practice by capping the battery voltage^(45)).  Another risk is due to the zinc dendrites, which can grow large enough to pierce the separator and short-circuit the battery.

Certainly the biggest safety hazard is the bromine.^(37,46) During charging, bromide ions Br^(-) oxidize at the cathode to produce free bromine molecules Br2. This is a problem since bromine is highly volatile (it vaporizes easily) and extremely toxic, with a NIOSH IDLH value of only 3 ppm. For reference, carbon monoxide has an IDLH value of 1,200 ppm, and the chlorine gas used in WWI has a value of 10 ppm. To make matters worse, bromine vapor is denser than air, meaning it lingers near ground level, can pool up at lower elevations, and is more difficult to ventilate (there’s a reason all chemical weapons use dense gases). It’s also highly corrosive, so it can cause severe chemical burns even if not inhaled and will chew through most materials in its path.

It’s fortunate that the methods to decrease the risk are the same as to increase performance: trap the free bromine in more stable compounds. But the risk is still there, especially in scenarios of overcharging where all three undesirable reactions occur most vigorously and so compound the problems upon each other.

Overall, ZBBs find themselves in a somewhat awkward position. Their material costs are comparable to SIBs while their performance is slightly worse overall, with self-discharge being a particular concern. Their lack of fire risk from thermal runaway is offset in large part by the fire risk from hydrogen evolution, the electrical risk from dendrite growth, and especially the chemical risk from bromine leakage. Even if the risks are mitigated with time, like LFPs, they can’t be eliminated. The source of most of their severe issues is the bromine and so their future will largely be dictated by how effectively it can be contained and controlled. Their impressive areal density, at the very least, will probably guarantee them some market share, although space-constrained projects tend to occur in urban areas where safety concern is largest.

As for comparison with VRFBs, here also I don’t see too many use cases where they compete directly. Static ZBBs don’t fare any better than SIBs when it comes to longevity, and they can’t be easily scaled to extra-long durations like 12h+ as VRFBs can. The only case I can think of where ZBBs would take away from VRFBs is when fire risk is a major concern but for some reason chemical risk isn’t, which I doubt would happen often.

Iron Redox Flow Batteries (IRFBs)

A promising but earlier stage technology, IRFBs come in more flavors than ice cream, but they all operate on similar chemistry and face similar challenges. I’ll therefore focus on hybrid all-iron flow batteries (AIRFBs), since they’re the closest to commercialization. Hybrid AIRFBs are so named because on one side they pump electrolyte through a porous cathode, like aqueous RFBs, while the other involves stripping and plating metal off of the anode, like ZBBs. Their most prominent producer outside of China is Oregon-based ESS Tech.

Schematic diagram of a hybrid AIFRB

AIRFBs have a lower energy density than VRFBs, and have the lowest RTE of the batteries considered, peaking at ~75% DC in optimal conditions.^(47) They boast an impressive temperature operating range, going up to 60 and possibly 80 C at the higher end and possibly down to -20C in the lower end with electrolyte engineering.^(48) These numbers are all essentially in line with ESS’s claims of 70-75% DC RTE and ambient temperature range of -5 to 50C. Like VRFBs, they also use the same element in both half cells, which reduces crossover complications. Since they are hybrids, their power and energy scaling are only partly decoupled.

Certainly the most promising advantage of AIRFBs compared to VRFBs is their material cost, since it doesn't get much cheaper than iron. The main material cost driver will likely be from the electrolyte additives, some of which can be quite expensive,^(47) but that remains to be seen.

The greatest challenges faced by AIRFBs are longevity and reliability. ESS claims a >20,000 cycle life, but that has not been verified in practice (research rarely goes beyond 1,000 cycles^(47)), and the technology is known to exhibit several issues that threaten efforts for large scale deployment.

First, the ferric ions Fe^(3+) can react with the hydroxide in the acid to produce solid ferric hydroxide (basically rust). This process is called hydrolysis, and it leads to the loss of active materials, precipitation, and capacity fading.

Second, as in all acidic batteries, hydrogen evolution reaction (HER) occurs in the anode of AIRFBs too, but it's especially severe with iron, to the point where an AIRFB without means to mitigate it will be bricked within a dozen cycles.^(49) As with ZBBs, this reaction creates hydrogen gas, and reduces the battery's efficiency by consuming electrons in the anode.

It's particularly unfortunate that these reactions are exacerbated in opposite directions. Making the electrolyte more acidic means increasing the proton concentration, hence accelerating HER. But making it more basic means increasing hydroxide concentration, hence accelerating hydrolysis. This also means one reaction accelerates the other: for example, a sudden increase in HER will raise the pH of the electrolyte, which will increase hydrolisis and bring it back down, except now with a bunch of hydrogen gas and Fe(OH)3 precipitate.

Then there is dendrite growth, which makes a comeback here since we again have stripping and plating of metal in the anode. Dendrites make things worse through a positive feedback loop: their fractal-like structure greatly increases the surface area of the iron, which increases the rate of HER and dendrite growth. Beyond that, they also do their own damage by creating metallic “dead zones” that don’t participate in the battery operation and by again posing the risk of puncturing the separator and causing a short-circuit.^(50)

These all remain open problems of AIRFBs, and require sophisiticated solutions. ESS, for example, aknowledges the inevitability of HER and instead describes patented "proton pumps" designed to take the created gas out of the anode, oxidize it back into protons, and introduce it to the cathode electrolyte. They also attempt to maintain different pH levels in both half-cells: lower near the anode and higher near the cathode, thereby addressing the "different directions" problem. AIRFBs also typically add ligands to their solutions—stabalizing additives that aim to reduce the rate of undesirable reactions.

In terms of safety, AIRFBs also fare worse than VRFBs. Like ZBBs, their electrolyte is less acidic (pH ~1 near the cathode in ESS's case). Also similar to ZBBs, HER and dendrite growth introduce some risks, but they're not too severe on their own, particularly if the batteries are installed outdoors where the light hydrogen can easily disperse. Additionally, AIRFB electrolyte uses hydrochloric acid, which has a higher vapor pressure than the sulfuric acid of VRFBs and emits HCl vapor when exposed to air.^(51) In overcharge scenarios, the chlorine ions can also be oxidized into free chlorine gas, which is bromine's less toxic but more volatile sibling. However, unlike ZBBs, AIRFBs don't involve the creation of free halogens during their normal operations, and they can overall be regarded as the safest of the three technologies considered in this section.

AIRFBs probably have the greatest potential to compete directly against VRFBs due to their potential for low upfront cost and relatively high safety, but they have a long way before they can get there. In spite of their innovations, ESS continue to report quality and performance issues in their installed units,^(52) and state their ability to continue as a going concern. To give some perspective for the timeline, they recently announced a demo project in Florence, Arizona to evaluate the performance of their new Energy Base batteries.^(53) The project is planned to be delivered by December 2027, and will need to run for several more years to get a proper assessment, where any mishap would push the timeline several years further. Even if sufficient reliability is confirmed, there would still remain the challenge of preserving it while lowering production costs enough to compete even with their lower RTE and longevity. All this is to say that AIRFBs won't be a concern for VRFBs for a long while, if at all.

Roundup

There's been a lot of information in this section so here's a little comparison table for some of the key metrics. Note that, apart from VRFBs, cycle life is heavily dependent on conditions like depth and rate of discharge. Reliability roughly indicates the chances that the technology, in its current state, will experience failure or performance issues or that its longevity will be reduced prematurely.

~	Max DC RTE	Cycle life	Safety	Reliability	Areal energy density	Raw material costs
LFP	97%	~6,000	Low	High	Mid-high	Mid
VRFB	85%	Infinite	High	Very high	Mid^(**)	High
SIB	90-95%	2,000-5,000	Low	Mid	Mid	Low^(***)
ZBB	90%	1,000-6,000^(*)	Mid	Mid	Very high^(**)	Low^(***)
AIRFB	75%	TBD^(*)	Mid-high	Low	Low-mid^(**)	Low^(***)

*Large gaps between demonstrated research and commercial claims.

**Can increase with additional vertical stacking.

***Can vary substantially with choice of electrode materials and electrolyte additives.

To summarize: VRFBs are not a disruptive breakthrough that's going to dethrone kings and forever change the BESS market. They are a technology that excels in a number of specific but important properties for which demand is rapidly increasing, and whoever capitalizes on that excellence stands to make a lot of money...

Invinity Energy Systems

Brief History

Much of this part is based on easily searchable company announcements, so to refrain from making half the post a citation list, I won't cite every development unless I use sources other than Invinity itself, or if the source is obscure enough to warrant it.

Invinity was born in April 2020 out of a merger between UK-based redT energy and California-based Avalon Battery Corp. Soon after they launched their first post-merger product, the VS3 battery, which began production in their Bathgate manufacturing facility.

2021 was mostly dedicated to delivering their inherited order backlog as well as securing newer, bigger projects. By the end of that year, they reported a 690% increase in revenue over 2020 and completed a successful £25m equity placement at 100p per share to accelerate growth.

2022 saw the completion of their largest project to that date: the Energy Superhub Oxford. The project combined a 2MW/5MWh VS3 battery with a 50MW/50MWh Li-ion battery to provide a real-world demonstration of the technologies' ability to complement each other. The VRFB, with its superior cycling ability and longer duration, would act as the first response for heavy-cycling and frequency matching, while the LIB, with its higher power output, would provide peaking services as needed.^(54)

Meanwhile, across the pond, Invinity secured a 10 MWh order for the Viejas Tribe in California. The microgrid project recieved a $31m grant from CA's Energy Commission, the first to be awarded under their LDES program,^(55) and combines Invinity's batteries with 60 MWh of Eos's ZBBs. This won't be the last hybrid project to contract both companies.

They also signed their first Chinese partnership with Baojia New Energy, a contract manufacturer. Baojia produces components to be delivered to Invinity's factories and integrated into finished products.

In March 2023 Invinity completed their second equity placement, raising £23m including a £2.5m strategic investment by Taiwanese Everbrite Technology, signaling the beginning Invinity's penetration into the country's market (I elaborate on the various global partnerships below).

In mid-2023 they expanded their manufacturing capabilities to meet rising demand. They formally opened a second factory in Vancouver, Canada, with a production capacity of up to 200 MWh per year. They also increased their global penetration, with new sales in the US, Hungary, Australia, and Canada, including the completion of an 8.4 MWh project in Alberta that further validated the technology's capacilities in cold climates.

2024 was the transitional year to their newest generation batteries. In May, they completed their largest placement of £56m, £25m of which was a direct equity investment by the UK National Wealth Fund, making the UK government the largest shareholder of the company with 19.11% ownership at the time of writing. An additional £3m was invested by Korea Investment Partners.

Invinity used the fresh capital to further expand their production, opening a third factory in Motherwell, Scotland for their new generation batteries. 6x the size of the Bathgate factory, it opened with an initial capacity of 500 MWh per year.

In September, the company's CEO, Larry Zulch, went into retirement. In his place the company appointed Jonathan Marren, previously the CFO and Chief Development Officer and a certified Howard Hamlin lookalike.

In December, Invinity finally lauched Endurium, designed specifically for large utility/grid-scale 12-500+ MWh projects. The battery is highly modular, with discharge durations between 4h and 18h. It increased energy density by more than 60% and more than halved the calendar degradation rate, bringing it down from <0.5% capacity fade per year to <0.2%. Most importantly, its manufacturing process allows for major cost reductions over VS3.

2024's transitional nature marked the financial low point of the company. It recorded only £5m in revenue in contrast to the previous year's £22m , as developers were reluctant to order VS3 batteries for large-scale projects with Endurium around the corner. The approaching US election and new program announcements like the UK LDES Cap & Floor scheme (more on that later) also made developers slow their decision making as they assessed the impacts—positive and negative—on their projects. This slump didn't last for long.

2025 and the past two months were host to an avalanche of global expansion, strategic partnerships, and enormous growth opportunities. Most of them are significant enough to deserve a subsection of their own, so I'll restrict myself to the more broadly relevant developments here.

Gamesa Electric in Spain were the first to order Endurium with a 1.2 MWh purchase. Soon after, Invinity recived an order of 10.8 MWh of Endurium for STS Group in Hungary, as well as 4 MWh of VS3 to Ideona, also in Hungary. There was the 12.5 MWh sale to the PNNL, which I've talked about above, and Everdura—Everbright's subsidiary and Invinity's strategic partner in Taiwan—signed a 14.4 MWh order of Endurium. Lastly, keeping the Hungarian streak, on January 2 of this year Ideona ordered an additional 20 MWh of Endurium across two different sites, marking Invinity's largest sale to date. On April this order was cancelled to due unexpected circumstances on Ideona's side, but they have commited to have the batteries delivered to another project at a later date.

In March, the UK Department for Energy Security & Net Zero, under the Longer Duration Energy Storage (LoDES) Demonstration competition, announced its intention to award Invinity £7-10m to develop and own a 21.7 MWh solar+BESS facility. The grant received final confirmation in August with a figure of £10m. The project, now called the Copwood VFB Energy Hub, was delivered this month and is (at the time of writing) the largest VRFB system in Europe. It's expected to connect to the grid later in 2026 and generate regular income.

In May, they reported a 24% cost reduction on Endurium vs launch price.

In July, Invinity entered a licensing and royalty agreement with Guangxi United Energy Storage New Materials Technology Limited (UESNT, catchy name), a Chinese manufacturer of vanadium electrolyte and battery products. I discuss it more below but I'll mention here that it contains a provision for Invinity to source vanadium electrolyte via UESNT at a fixed price, or purchase vanadium products at a discount to the prevailing market price in China, sufficient for the needs of 6 GWh of VRFBs. The agreement thus completely eliminates any uncertainty regarding vanadium pricing for the entire duration of Invinity's growth period, and beyond it.

In September, they announced the launch of Endurium Enterprise, a variant of Endurium aimed at commercial and industrial businesses and optimized specifically for medium-scale microgrids and behind-the-meter projects (including data centers). It supports 4-80 MWh storage and 3-18h discharge durations. They also provide a more complete package, incorporating features like control and power conversion within the product for streamlined deployment. The first sale of the new product was confirmed two months later with a 3.5 MWh order from Charles Murgat in France.

That same month, they reported Endurium was 36% cheaper than at launch, and 43% cheaper than VS3, beating their previous published estimates on the cost reduction rate.

Endurium's cost roadmap from the HY 2025 report, compared with their previously published roadmaps.

Also in September, Invinity entered yet another enormous market via a partnership with Indian Atri Energy. The partnership included a strategic investment of £25m, £12.5m from Atri and £12.5m from Next Gen Mobility, further bolstering Invinity's balance sheet.

In their 2025 end of year update, they announced the completion of a new semi-automated stack line in Bathgate, doubling the site's production capacity. Earlier this month they reported that they will be able to achieve at least 66% cost reduction compared to VS3 by 2028—18 months ahead of schedule. They now are well on track to surpass industry veteran Sumitomo and become the largest VRFB manufacturer by deployed capacity outside of China (Chinese Rongke Power dwarfs them both—for now).

Financials

Ownership

Invinity's disclosed major shareholders' stakes are:

• National Wealth Fund: 19.11%
• Atri Energy Transition Private Limited: 11.27%
• Next Gen Mobility Limited: 11.27%
• Schroders plc: 9.97%
• Janus Henderson: 5.31%
• Artha Global Opportunities Fund: 3.94%.

Additionally, Everbrite disclosed 1.77% ownership in their latest report.^(56) That's a minimum of ~62.6% of the company under government and institutional ownership. If Korea Investment Partners kept all their shares, they have 2.29% ownership.

Insider ownership is primarily via performance-linked options, amounting to ~3.93% ownership if all are exercised. ~0.44% comes from options to be vested on Jul 19, 2026, with an exercise price of 0.53p. Another ~3.29% have an exercise price of 0.23p. Of those, half are vested in three equal yearly installments, starting at 30 Jan 2026, as long as the share price is >=16p at the time of vesting (so a third vested so far). The other half will be vested on 30 Jan 2028, provided the share price is >=100p. The rest comes from older option packages with exercise prices between 45p and 434p. There is also ~0.38% direct equity ownership.

Lastly, Gamesa Electric has 8,672,273 options (~1.5% ownership) with an exercise price of 175p, expiring on 10 May 2026. This would add ~£15.2m to the cash balance if exercised, but the share price almost certainly won't jump that high that quickly unless something outrageous comes out of Cap and Floor straight away.

Earnings and Cash Balance

The latest solid info on Invinity's financials comes from their deceptively negative H1 2025 earnings (UK companies report half-yearly). They reported a measly £0.256m in revenue and £2m in recieved grants, for a total of ~£2.2m. The cost of revenue was ~£2.2m and operating costs ~£10m, amounting to a net loss of ~£10m. If you think that's peculiar considering what I've described above, your intuition is correct.

The launch of Endurium at the tail-end of 2024 meant that FY 2025 revenue was heavily H2-weighted, as revenue from projects is only recognised in the books after installment and satisfaction of specific performance obligations.^(57) Moreover, of the £10m Copwood grant, only £2m came in early enough to be recorded in H1. At their end of year update, Invinity disclosed £17m in revenue+grants. This figure doesn't include their two biggest orders: the 14.4 MWh for Everdura and the 20 MWh for Ideona, both of which are still in the process of delivery.

As for the balance sheet, they disclosed ~£18.7m in cash and cash equivalents by H1 end. We can get a more current estimate of their cash balance by adding the £25m from the Atri investment for ~£43.7m. Their operations + investing + lease payments cash expenditure has been consistently ~£13.5m for the past three half-years (HY). H2 2025 differs in that it didn’t include any manufacturing expansion, but it did include a lot of Copwood’s construction, so it’s reasonable to assume ~£13.5m for that HY as well. We’ll neglect the ~£7m revenue from H2 entirely since we don't yet know how much their margins improved with Endurium's cost optimization, as well as the extra ~£8m from the Copwood grant since it only partially covered the site’s costs. That's conservatively ~£30.2m in cash by the beginning of 2026, which is indeed almost exactly the lower bound of current analyst estimates (£30.1m-£36.8m). Invinity has zero debt.

CapEx and Runway

Seeing as Invinity are in the midst of an aggressive expansion phase, it’s worthwhile to examine the contribution of manufacturing capacity increase to their cash burn. The construction of Motherwell with its 500 MWh yearly capacity began in H1 2024 and the facility began operations in H2 2024. Invinity‘s FY 2024 results reported £1.294m cash investment for “Acquisition of property, plant and equipment” (APPE) in that year. Operations + investing + lease payments cash burn averaged ~£13.5m per HY in 2024.

The installation of a new semi-automated stack line at Bathgate began and ended in H1 2025, and Invinity reported £0.924m cash outflow for APPE for that HY, which likely includes some overhead from Motherwell. Unfortunately, I couldn’t find any info on the capacity of this new stack line, only that it doubled Bathgate’s previous capacity. Operations + investing + lease payments cash burn was ~£13.3m that HY.

For 2026, the new manufacturing capacity will be in the US. Invinity plans to construct two stack lines in its (as of yet undisclosed) strategic partner’s existing California facilities, for a total capacity of 1 GWh per year. Going by the content of their vacancy page for a Production Engineering Manager, it seems that they also plan to ramp up their other facilities. Using Bathgate’s added stack line and Motherwell’s 500 MWh capacity as very rough references and taking into account that expansion into a new country is doubtless more expensive overall, the cost can be expected to be £2-4m.

The bottom line here is that Invinity demonstrably manages to preserve a steady operating expense during this ongoing expansion period. I’ll mention in passing that Jonathan Marren, the CEO, comes from a finance background and as mentioned, served as the previous CFO of the company (Matt Harper, the president, is an engineer). Even with our unforgiving ~£30.2m cash estimate and an equally unforgiving projection £4m APPE cost with revenue margins that remain negative, that’s still ~£15m per HY, so enough runway to last all of 2026. A more balanced assessment, which includes Endurium sales and new revenue streams from royalties (stay tuned), yields a runway that extends well into 2027.

Dilution risk

Dilution risk assessment is not about whether it will occur more than it is about how impactful it will be when it occurs. Invinity will turn profitable in H1 2027 at the earliest, so even with their current runway, they will inevitably need to raise more capital. As outlined in the Brief History section, their preferred method of doing so is a direct equity placing/subscription (some events included open offers, but they were always a small part, becoming increasingly negligible with each raise). They have performed one once a year, every year, since 2021 barring 2022. I’m not including the various dilutive effects from their 2020 post-merger capital restructuring and initial fundraising since that’s clearly not indicative of any long-term trends.

There’s no reason to believe that their preference will be any different going forward. I see two main possibilities:

• First case: Government schemes like Cap and Floor end up approving an unexpectedly large amount of VRFB contracts. Invinity will then probably raise more funds around the middle of 2026 to accelerate capacity expansion. I doubt anyone would complain in such a scenario.
• Second case: Scheme-approved VRFB projects are manageable with current expansion rates (or are zero), in which case fundraising will probably occur near the end of 2026 or the beginning of 2027.

While I’m certainly not ruling out the possibility of the first case, it’s obviously more prudent to assume the second. At the core of this thesis is the projection that due to the explosive growth of the VRFB market, Invinity’s rapidly expanding order book and market penetration, and Endurium’s increasingly competitive costs, we are well past the point where the increase in enterprise value starts outpacing any future dilutive decrease in share value.

To these I will add the following comments: First, the last few dilutions were made under highly auspicious circumstances. The 2024 equity placement involved the UK government stake and was immediately proceeded by the construction of Motherwell, while the 2025 placement was a strategic investment that opened access to one of the largest energy markets in the world and funded the company’s ambitions for this year.

Second, as mentioned above, Copwood will be connected to the grid later this year, and will be entirely owned and operated by Invinity. The project has a ~£21.4m CapEx and once operational, Invinity has the option of selling it. They’re clearly open to the option of doing so, as they’ve said that full ownership of the project “maximizes value on disposal or other monetisation event in the future”, and I find that outcome is likely given their current priorities for growth and cost reduction. The particularly high demand for energy management services in the UK certainly contributes to its value. Should they choose that path, it would obviously greatly reduce the need for funding from dilutive sources.

So far, all the arguments have been purposefully based only on Invinity’s core operations, without reliance on particular catalysts, as I view the former as the most important in the long term. That being said, there are a whole lot of exciting developments to look forward to in the nearer term, and it’s time to see what they are.

Sources in comments.

Hi everyone.

This three-part DD was originally uploaded to some investing subreddits and I've been asked to upload it here to since it provides a nice overview of Invinity and its prospects. The first part is a macro picture discussing VRFBs and making a case for their commercial viability. The second part compares VRFBs to competing technologies and introduces Invinity's history and financials. The third part discusses their global expansion, opportunites, and recent developments. The whole thing ended up quite long and I had to split it into three posts, but I believe it’s worth the read considering the opportunity presented here.

TL;DR

- As renewable penetration grows, both the market and policymakers are placing increasing importance on long duration energy storage.

- Vanadium redox flow batteries are a BESS technology characterized by decoupled power and energy scaling, infinite cycling, very long lifetime, high EOL value, and high safety. No other BESS technology—either existing or approaching commercialization—beats VRFBs in any of these categories.

- VRFBs have a lower energy efficiency than Li-ion, and they are currently well behind on upfront costs. The latter acts as the main hinderance to their mass commercialization. But the gap is rapidly narrowing, and they are already passing the point where the higher upfront cost is justified by their unique advantages in many use cases.

- The VRFB market is projected to grow at a ~20% CAGR. This growth is expected to be bounded by global vanadium supply, rather than demand.

- Invinity is the 3rd largest VRFB manufacturer by deployed capacity, soon to reach 2nd place and become the largest one outside of China.

- Utilizing increasing production scale and automation, raw material supply deals, and component manufacturing outsourcing, they are achieving rapid cost reduction with their new generation Endurium batteries. Their order book and backlog are commensurably growing.

- They're expanding their global market penetration through new strategic partnerships and MoUs. These include royalty agreements with domestic manufacturers in China and Taiwan, raw material supply agreements from China and the US, and establishment of new domestic production capacity in the UK, Canada, the US, and possibly India (either that or another royalty agreement for the latter).

- They have no debt and a clear cash runway well into 2027. In addition to increasing orders, they're opening new revenue streams from the royalty agreements and their own VRFB project. The UK government owns a direct 19.11% equity stake, and institutional+government ownership is at least 62.6%.

- New government programs worldwide to promote LDES solutions hold the potential to increase their backlog by orders of magnitude. The biggest short-term catalyst is the UK Cap & Floor scheme.

There's a lot of important information to cover beyond these points, so I would recommend taking the time to read the whole thing.

Part 1: Let the Power Flow

Feel free to skip to the next section if you know what LDES is.

I imagine that everyone reading are aware of the global energy crisis and the frantic drive to develop new energy sources. While nuclear is starting to see some love after decades of suspicion, it’s clear that renewables are the go-to solution for developers and projects seeking clean, affordable, sustainable power, and will remain an integral part of the energy grid for the foreseeable future. This is evidenced by the fact that renewables continued to be the fastest growing energy sources in 2025, in spite of policy headwinds from the US.^(1)

Although its sustainable nature and cheapening costs show promise, renewable energy faces several challenges, the largest of which are Intermittency and Variability. The premise for both is simple: the sun doesn’t shine and the wind doesn’t blow according to our energy needs. Looking at utility solar, peak power demand is during the morning and evening, while peak supply is during midday. This was a major inconvenience when renewable penetration was still small but is now developing into a full-blown crisis. Suppliers are often forced to deliberately curtail their output to avoid overwhelming the grid, incurring massive financial losses, while consumers find themselves paying more as a result. For example, wind projects in the UK are regularly forced to curtail more than 50% of their possible output.^(2)

The solution, of course, is energy storage systems (ESS). Excess power is stored during times of high output and low demand and discharged when the opposite occurs. This is called load shifting. Other uses include peak shaving, wherein the ESS takes on some of the discharge burden during peak generation to optimize efficiency (important for nuclear reactors, too), and frequency matching, wherein the ESS corrects deviations to match the plant’s frequency to that of the grid.

The first two are the most crucial to solving the renewable problem and specifically call for long duration energy storage (LDES). These are ESS built with large enough capacity to contain significant excess energy during low demand and discharge it later on. They are usually categorized as having a discharge duration of 8h+ (though many applications can demand multi-day or even multi-month duration, the latter for seasonal balancing). This is in contrast to the majority ESS deployed today with 4h duration at most. The discharge duration is defined as the ratio E/P between the energy capacity and peak power output.

The rapidly growing demand for LDES is attested to by the sheer number of government-level programs and tenders incentivizing the construction of such projects. I’ll discuss a few of them below in relation to Invinity.

VRFBs

Among the various technologies existing today, battery energy storage solutions (BESS) are receiving particular attention due to their rapid deployment, low footprint, low cost, and high efficiency. Any current conversation on BESS is almost entirely dominated by lithium-ion batteries (LIBs), particularly LFP chemistries, and perhaps sodium-ion batteries in some of the more forward-looking discussions.  But buried under the attention of ion batteries is another technology that promises to be even more ideal in certain applications: redox flow batteries (RFBs).

A schematic illustration of a VRFB

 The most common form of RFBs is aqueous redox flow batteries (ARFBs). These are comprised of two electrolyte solutions separated by a membrane. The porous electrodes of the circuit are each submerged in their respective electrolyte in the part of the battery known as the stack, while the rest of the liquid is stored in tanks. As the battery charges (or discharges), the electrolyte is pumped through the stack, in which it reacts with the electrodes to give or take away electrons. The membrane is designed to allow a specific ion to move through it while remaining impermeable to the others, and the movements of these charge-carrying ions completes the circuit.

This technology offers several major advantages over ion batteries, the most well-known of which is:

>Decoupled scaling: In ion batteries, both the energy and power capacity are proportional to number of electrochemical cells. This means that if one wishes to increase the energy capacity, one has to multiply all the electrochemical hardware in proportion, even if there’s no need to increase the power. This also requires a thorough modification of the entire battery’s design, including auxiliaries, which makes it costly to customize both its power and energy to a specific project’s needs.  

On the other hand, in ARFBs the energy capacity is determined by the amount of electrolyte, while the power capacity is governed by the size of the stack. To increase the energy, one only has to get bigger tanks and add more electrolyte, leaving the rest of the components as-is. Flow batteries therefore have the potential to be much more economical in LDES applications that require large energy capacity but not necessarily greater power delivery, especially if the electrolyte is cheap. This is the most commonly discussed advantage of ARFBs.

Currently, the only RFB technology mature enough to begin seeing mass production is that of vanadium redox flow batteries (VRFBs), which have seen commercial deployments since the late 90s. These are followed by hybrids like zinc-bromine flow batteries and all-iron flow batteries, and the promising yet early stage organic flow batteries. VRFBs use vanadium electrolyte in both of their half-cells, while protons are the charge carriers crossing the membrane (see the figure). They are the only ARFB close to commercialization (the rest are hybrids), and offer several distinct advantages:

>Safety: Lithium battery fire is one of the worst kinds. It’s impossible to extinguish, can last for days, and continuously emits toxic and explosive gases into the air. LFPs offer significant stability improvements over NMC and NCA, but the risk is still there and is often too large to accept. Utility BESS projects routinely get shot down at the municipal level,^(3-6) as communities fear their severity and worry that the local fire departments are ill-equipped to handle such hazards. Many cities and towns are even banning Li-ion BESS entirely within their jurisdiction^(7-10). Projects involving critical infrastructure or expensive hardware (mines, factories, data centers, military bases, etc.) are also not thrilled about the prospect of a flaming portal to hell opening in the adjacent room.

>VRFBs, on the other hand, are non-flammable. There is zero fire risk. Not only does this open market segments that are closed off entirely to lithium, it also improves costs, as there’s no need to spend capital on expensive suppression systems, rigid fire permitting, and costly insurance.

 

>Longevity: The operating cycle of ion batteries inevitably involves side reactions that immobilize the ions in inactive compounds or damage the electrode structure, causing degradation. In contrast, the redox reactions in VRFBs are completely chemically reversible (it’s just solvated ions gaining/losing electrons), netting them an effectively infinite cycle life. The main process contributing to their aging is crossover, in which ions other than the charge carriers slip through the membrane over time. This process occurs at an essentially fixed rate (cycling can actually slow it down^(11)), meaning VRFBs experience only calendar aging, and can last several times longer than LFPs under even moderate operation conditions. Probably the main reason that VRFBs are the most mature technology is the fact that they use the same element in both half-cells, meaning there are no damaging, irreversible reactions that occur when ions from one half cross into the other. Invinity claims a 30+ year lifetime with infinite cycles for its latest gen Endurium batteries.
This property also makes VRFBs very lucrative at the use case opposite to LDES: short duration, high-cycle applications where other batteries will reach end of life within only a few years.

 

>Recyclability: A dead LIB is essentially waste. Gaining some end of life (EOL) value requires shredding it recovering the most precious elements from the black mass via a complex chemical process. This is worthwhile for NMC or NCA batteries, which contain valuable nickel and cobalt, but less so for LFPs, whose only precious materials are lithium and copper.
As explained above, a VRFB reaches EOL when crossover mixes the two electrolytes beyond a certain threshold. Since the vanadium ions don’t react destructively with each other, the electrolyte is fine, it’s just electrically imbalanced. All that is required is taking out the electrolyte, rebalancing its oxidation (a relatively simple process), and chucking it right back into another battery.

 

>Temperature stability: LFPs are rated for an optimal operating temperature of 20-30C. But even within this range their performance varies significantly, and so developers take care to maintain their temperature narrowly around 25C. This requires LFPs to be equipped with bulky HVAC systems that not only increase costs, but also reduce the battery’s efficiency due to their parasitic power consumption, particularly in hotter climates.

>In contrast, VRFBs can operate comfortably anywhere between 10-40C. Furthermore, since their entire operation involves a giant mass of liquid continuously flowing around them, they act as their own cooling systems, requiring only fans to carry off the heat. This also makes them less noisy—always a bonus for residential deployments.

 

>Financing: The fact that the electrolyte in a VRFB retains nearly all its value even at EOL presents a unique financing opportunity. Developers can pay for the battery but lease the electrolyte, returning it to the vendor at the end of use. This is incredibly lucrative for cash-tight developers as it effectively transforms most of the battery’s CapEx into OpEx, allowing for potentially unprecedented day one costs.

“Wow, this is incredible”, you may say, “why aren’t these all over the place yet?” Well, there is one major reason:  

>Cost: Most of it can be attributed to the “economics of scale” advantage that LFPs currently enjoy with automated manufacturing and highly optimized logistics chains, but there’s a deeper issue. Recall me saying that the decoupled scaling of ARFBs is most advantageous when the electrolyte is cheap. Vanadium isn’t expensive, but it’s certainly not cheap, and VRFBs use a lot of it. Moreover, over 2025 we’ve seen LFP battery pack prices fall off a cliff,^(12) to the point where the average LFP pack price in China approached the raw material cost of vanadium in VRFBs (~70 $/kWh vs ~46 $/kWh, using the figure of 2.72 kg/kWh.^(13) All capacities in this section are nominal). This means that even after VRFBs catch up in terms of production optimization, the cost of scaling LFPs could be comparable to that of VRFBs, possibly cheaper, depending on future price trends. This would essentially nullify the most historically discussed advantage of VRFBs.

It’s difficult to predict which technology will end up cheaper in the end. On one hand, VRFB electrolyte cost is more than just the vanadium (~100 $/kWh in 2023^(13)), vanadium prices are only now recovering from a major slump, and the bottom price of LFP cells is yet unknown. On the other hand, pack prices are significantly higher outside of China (56% higher in Europe compared to only ~6% higher vanadium prices), the 2025 price fall was partly due to extreme competition and overproduction in China and pack prices are now rising again as demand catches up, vanadium electrolyte prices are decreasing with production scaling and novel production techniques,^(14) lithium and copper prices are increasing, and energy scaling is more than just material costs (simpler for VRFBs). Whatever the difference will be, it’s unlikely to be the slam-dunk for VRFBs that was hoped for several years ago.

Adding to the issue of costs is:

>Round-trip efficiency (RTE): This measures the fraction of the energy input to a battery that ends up being discharged rather than wasted. LFP cells boast an impressive DC RTE of up to 97%, while average deployed RTE including power conversion and auxiliaries like HVAC averages about 85% at ambient temperature of 25C.^(15,16) Annoyingly, I couldn’t find any treatments of total LFP RTE dependence on temperature, but that can be roughly pieced together. Reference [17] provides an interpolated curve of auxiliary power consumption as a function of ambient temperature. Using that curve, assuming typical DC RTE of 95%, and that auxiliary power is responsible for ~3% RTE loss at 25C (in practice it varies enormously depending on the duty cycle^(15)), we get a rough RTE of ~82% at 35C and ~80% at 40C.

>VRFBs have demonstrated a DC RTE of up to 85%.^(18) Invinity’s Endurium product sheet shows a max installed RTE of 70%, which means average RTE of about 65-70%. Although improvements in electrolyte concentration and flow field, stack, and membrane design will probably push this upwards in the future, the gap will never close, and will probably never drop below 10%.

There’s another issue hurting the outlook on VRFBs. The single most common financial metric for ascertaining a battery’s commercial viability is levelized cost of storage (LCOS). LCOS, measured in $/kWh, is a ratio between the battery’s total costs over its lifetime to the total power it will discharge during said lifetime, both subjected to a yearly discount rate. Unfortunately, most LCOS estimates use a merchant-like discount rate of 8-12% real, which does not allow VRFBs to make up for their current higher initial costs and lower efficiency with their superior lifetime and EOL value.

The nullification of what was supposed to be the key advantage of VRFBs in the face of plummeting LFP prices has led most to lose faith in them as “the great LDES LIB replacer” and to write them off entirely. That was a mistake.

First of all, VRFBs could never have become the leading LDES technology anyway, regardless of pricing, since their maximal production is constrained by global vanadium supply (more on that below). But the crucial fact is that they don’t need to be much cheaper than LIBs. All they need to be is cheap enough to justify a premium for developers that prioritize safety, longevity, cycling tolerance, and reliability, or for developers willing to pay more overall in exchange for a lower CapEx. This is more than possible, and the BESS market is expanding so rapidly that these use cases alone will be plenty to saturate the demand for VRFBs. This viewpoint is evidently shared by analysts, who even in their most recent reports anticipate an explosive ~20% CAGR for the VRFB market in the coming years.^(19-21)

Aside from the two issues above, VRFBs have a couple more minor downsides that should be mentioned for completeness.

>Energy density: The volumetric energy density of VRFBs is about an eighth that of LFPs.^(22) This makes them unsuitable for portable applications like mobile devices or electric vehicles, and you may think that the difference is large enough to even be substantial in BESS applications. However, safety standards like NFPA 855 force LFP batteries to be placed well apart to minimize fire spreading and allow firefighter access, and insurers are usually even more strict. On the other hand, VRFBs can be packed right next to and even on top of each other, which means the practical energy density per acre of Endurium is currently about two thirds as that of LFPs.^(23) Technological enhancements to electrolyte density as well as the possibility of three-high stacking promise to actually give VRFBs the edge in the future.

Rendering of a possible configuration of Invinity's Endurium batteries.

>Acidity: VRFB electrolyte is highly acidic, with a pH well below 1 and possibly going into the negatives, which introduces spill concerns. However, the sulfuric-acid based electrolyte of VRFBs has very low vapor pressure, so it doesn’t emit any gas or vapor, making spills easy to contain. Permitting and insuring are therefore simpler and cheaper than the battery fire equivalents. It’s also highly unlikely to be a safety concern for communities or critical projects (acid doesn’t spread, after all). Moreover, the electrolyte forces most of the battery to be constructed from corrosion-resistant materials, mostly plastics, which have low electric and thermal conductivity and therefore significantly reduce the risk from short circuiting^(24) (the electrodes and bipolar plates are carbon, but they’re a small part of the entire battery).

A final note before we continue. One problem with analyzing a rapidly advancing technology is the lack of objective assessments on its newest iterations—in this case, Invinity’s Endurium. To compare performances, I was forced several times to use numbers directly from Invinity’s spec sheet. Although the specs were independently verified by DNV, this is still not ideal, and luckily, it will not be the case for much longer.

In 2024, the Pacific Northwest National Laboratory (PNNL) opened its Grid Storage Launchpad, a facility designed specifically for third party testing of grid storage systems. In December 2025, it began to test its first utility-grade product: an Endurium battery.^(25) The battery will be subject to various tests throughout 2026, and positive results would immensely cement the technology’s commercial reliability. Of course, negative results would be terrible, but the fact that Invinity were confident enough to have their battery be the first to be tested in a state-of-the-art facility of one of the most reputable energy research institutions in the world should be cause for optimism. Moreover, they also confirmed the sale of another 500kW/12MWh Endurium battery to the PNNL, to be tested for its ability to provide 24h discharge duration.

The Vanadium Market

Vanadium sounds like it can only be found in Wakanda, but it’s actually about twice as common in the earth’s crust as copper. However it’s much less prone to form concentrated deposits, making it rarer in practice.

Vanadium has historically been closely linked to the steel industry on both the supply and demand sides. On the demand side, roughly 85-90% of global vanadium is used in steel alloys, which contain it in small quantities. Supply is also dependent on steelmaking: in 2024, 59% of global vanadium came from steelmaking slag, 24% from primary mining, and 17% from secondary production.^(26) This reliance on the ebbs and flows of a single market has caused significant price volatility in the past.

Timeline showing historical vanadium spot prices, key events in the vanadium market, and projected supply-demand gaps due to VRFBs. Reproduced from reference [26] with permission.

Now the vanadium market faces the challenge of the rapidly increasing demand from VRFBs. Currently there are still stockpiles of vanadium that was produced and not consumed due to a slump in the steelmaking market, but the gap is predicted to close as soon as this year. A 2022 study predicted that if production were to increase at a steady 10% CAGR, global VRFB capacity would be capped at 100 GWh in 2030.^(13)

There are efforts to push the ceiling above that. In the shorter term, secondary production from fly ash, coke residues, and especially spent oil catalysts is ramping up worldwide. Looking further ahead, primary production is also expected to increase. The efforts of many countries outside of China to boost domestic critical mineral production can be expected to accelerate this process, especially in Australia and North America, both of which are known to contain significant vanadium reserves.

That being said, the ceiling will remain and needs to be acknowledged. Vanadium supply will need to more than double by 2030 to meet projected demand from VRFBs (see figure). The good news as that vanadium prices can be expected to exhibit less volatilty with this new source of demand. More relevant to us is the fact that this provides a significant moat for existing players within the VRFB market, as other companies are unlikely to be willing to invest years of R&D and production ramping to enter a limited market. But to be perfectly clear, GWh-scale production is still 8-9 figures in annual revenue, and that’s more than feasible for Invinity, as we will see.

Sources in comments.